Sunday, November 1, 2009

Consider Pet Insurance

Did you know?
It's no secret that veterinary fees have increased significantly over the last ten years and will continue to do so to keep pace with the cost of doing business. Still, when you consider that the education, technology, medicines and protocols are all very similar in scope and cost to human medicine, then veterinary medicine is a bargain. But a major difference is payment requirements. Co-pays and billing options for human medicine have softened the cost for office visits and made access to care more available. In comparison, pet medical care requires payment up front for the full invoice and the price tag can come as a shock, especially in the case of an emergency.

Pet savings plans in theory are great, but very few people have the discipline and foresight to create a special account for pet medical bills. Saving even $40 a month will take a pet owner 6 years to save enough to cover an emergency surgery if your dog gets hit by a car or blows out a knee. But where does that leave you, the pet owner?

The pet insurance industry has been around since the early 80's, but pet owners and veterinarians have been resistant to using or advocating pet health insurance policies. Historically pet owners have found it hard to see a significant benefit for the cost and veterinarians have strongly resisted the idea of networks and the headaches found in human health care. But as prices increase and the bond between people and their pets strengthens more people are looking for a way to cover their costs and help ensure that a medical emergency doesn't become a life or death decision because of money. As a result there has been an increase in the number of pet health insurance companies. While there are similarities in practice between companies, there can be wide variations in the details of the policies they offer. So how do you choose the best pet insurance for your animals that fits your budget?

Let me tell you how.
I was surprised at the number of pet health insurance companies in the industry when I started researching available policies. Currently I know of eleven companies that insure in Colorado and there seems to be new providers popping up every year.

Covered vs. Excluded
All the companies I looked at exclude coverage for pre-existing conditions. But you really have to read the fine print to know the definition of pre-existing conditions. For example, some companies will insure a condition or incident in one benefit year, but upon renewal that condition or incident becomes a pre-existing condition. The condition is then excluded from coverage or a 180 day waiting period must expire before the condition is eligible for coverage.

Hereditary conditions are another stickler. I am aware of one company who will provide limited coverage for hereditary conditions as long as the pet is insured by age 2; while other companies won't cover hereditary conditions at all. The broadest coverage for hereditary conditions seems to be provided by PurinaCare whose literature states that "hereditary conditions are considered to be qualifying medical expenses if they are not pre-existing".

Then there are the categories of conditions that are covered only by purchasing supplemental coverage. For example, reimbursement for Hip Dysplasia requires a separate rider with Trupanion; and VPI requires purchase of an Enhanced Cancer Rider for cancer treatment coverage. I strongly recommend reading a sample policy before enrolling in a plan to be fully aware of the type of coverage your premium will buy.

Deductible and Coinsurance
You'll want to decide what type and level of deductible you can afford. Deductibles are either annual, or by incident, e.g. all visits and treatments related to a hit-by-car accident on a specific date. Deductibles range from $0 to $1000 and your monthly premium is directly proportional to the size of deductible you choose. Once you meet your deductible, reimbursement for veterinary medical expenses is usually stated as a percentage. A common level of reimbursement is 80% of our veterinary bill after deductible for illnesses, accidents and injuries. Companies with a fee schedule will only pay the stated amount per type of injury, illness, or treatment. This may still be a good option, but you should be familiar with the amount of coverage ahead of time.

Insurance companies are required to keep a certain amount of money in reserve based on the limits of coverage stated in their policy and the number of lives insured. The limit can be stated as a per incident limit, annual limit, and/or lifetime limit of coverage. When comparing plans consider that an incident can involve multiple types of care and treatment. An example might be an animal that gets hit by a car and comes in to the ER on a Saturday morning then needs an emergency splenectomy followed by a transfer to Internal Medicine for several days of hospital care. Then after being discharged from the hospital bandage changes may be necessary. This typical type of case could easily add up to $5,000. At 80% coverage your reimbursement would be $3600 (after you meet your $500 deductible); unless your incident limit is $1500. Then the most you could be reimbursed is $1500; an important factor to keep in mind.

Accident, Illness, Wellness

One of the biggest decisions will be between an accident and illness only plan versus one that includes coverage for a wellness or routine care plan. Most wellness plans are paid by benefit schedule, meaning there is a set dollar amount the company will pay for the services such as the annual exam, vaccinations, or heartworm test. Each benefit schedule varies and it might be beneficial to compare the listed reimbursement allowed against the cost of those services by your family veterinarian before deciding if paying for coverage is cost effective.

Some companies provide discounts for covering multiple pets. Discounts range from 5 to 15% off the premium depending on the number of animals insured. Other discounts might include 5% for microchipping or a small discount for paying the premium annually instead of monthly.

Monthly Premium
Pet insurance premiums are based on policy type, deductible, zip code, and species, breed, and age of your pet. Premiums can range from $5 to $250 per month based on the previously mentioned factors and the number of pets insured. You choose what works best for your monthly budget. Most likely your final decision will be determined by the premium, but be careful to look at the full picture to make sure you get the best value for the premium paid.

I just threw a lot of information at you all at once, kind of like getting sprayed by a fire hose. Let me turn down the dial a bit and give you the website of a company I would recommend. PurinaCare started offering policies just over a year ago. While they are new on the market, their brand has been around for many years and provides a solid reputation. PurinaCare offers two options PurinaCare Plus Preventive Care or PurinaCare without Preventive Care. Both are detailed on their website where you can also get a personalized quote.

Consider an accident only plan similar to those offered by ASPCA or Embrace. This sort of plan will cover things like bloat, foreign body ingestion, hit by car, poisoning, cuts and lacerations. The type of thing you always hope will never happen, but when they do seem to happen at the worse times.

Here are a couple websites where you can compare plans side by side:

Dr. Kay's book "Speaking for Spot" also includes a chapter on pet health insurance and has some great questions to consider in your search process.

AAHA (American Animal Hospital Association) gives the seal of acceptance to three companies. You'll find details on their website.

The moral of the story...protect your wallet and your pets' life, consider pet insurance.

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